Refinance and Equity
There are many different reasons to refinance your home, including taking out extra cash, debt consolidation, renovations, purchase of assets, reducing your cost of borrowing, lowering monthly interest costs, investing your equity and increasing cash flow.
Refinancing can help you to accomplish a great deal! You can use your home equity to invest in real estate or the stock market and earn a higher return than having it just sit there. By consolidating your debt you can substantially decrease your total monthly payments and improve your cash flow. Refinancing to do home renovations is also a really effective way to add substantial value to your home and enjoy it that much more!
These are just a few of the purposes for doing a mortgage refinance. Feel free to contact us if you have any questions or ideas about how why a refinance might be a good choice for you.
Something to keep in mind is that despite the varying number of reasons for refinancing your home, one cardinal rule still applies: you must own your home. You can refinance your home up to 95% of its value, but you will have to pay an insurance premium (CMHC, Genworth, or AIG). Alternatively, you can refinance your home up to 80% of its value without needing to pay the insurance premium (as your mortgage is then considered "conventional"). The value of your home is to be determined by an appraisal.
There are some fees that you may be responsible to pay for associated with refinancing your home, such as an appraisal fee and legal fees, but quite often these fees can be added to the mortgage amount. That way, you'll only have to pay out of your pocket initially, and will be reimbursed later when your mortgage funds.
